6 tips to keep your family from busting your budget

What do you do when family members want you to spend more than you have?

By Michelle Crouch

We
all have bad influences in our lives when it comes to spending and debt, but it
can be especially tough to stick to your financial goals when the pressure
comes from your family.

Whether
it's your brother constantly asking you to go in on expensive gifts, or your daughter
pushing you to spend money on something you can't afford because "you deserve
it," it's easy to fall off the financial wagon when the people who are supposed
to love you the most are the ones pushing you to make poor choices.

Holly Johnson of Indianapolis knows firsthand what it's like to be
a misfit in a family of spenders. Johnson, 32, says she and her husband make a
modest living and are extremely frugal, but they like to splurge on the things
they really enjoy, such as vacations.

"When we go somewhere, we like to go somewhere awesome," she says.
"That makes it tough because our family will say, 'How come you don't have
money to go out to dinner, but you can go on vacation so often?' They don't
understand that if we did all the stuff they asked us to do all the time, we
wouldn't have money to spend on vacation. That creates some tension."

Brad Klontz, a financial psychologist, says it's
natural to be uncomfortable when you spend time with people who have a lot more
or a lot less money than you, or who simply who have different spending
philosophies. The discomfort is heightened when the differences are within your
own family, he says.

"It all comes down to the animal instinct of wanting to stay with
the herd," Klontz says. "When you spend time with people who are out of your
financial comfort zone, your brain gets the message that you don't belong to
the group, and a lot of psychological and social forces do their best to bring you
back to that comfort zone. That's why wealthy people go home to their
middle-class families and pretend to poor."

It's
also why even the most frugal savers find themselves spending more than they
mean to when they're with their free-spending families.

The
good news is, with courage and a little foresight, you can stick to your budget even if you're surrounded by relatives who
just don't get it, experts say. Start with these six strategies:

Speak up. Tell yourfamily about your desire to be more frugal
so they'll be less likely to pressure you into unwanted spending or tease you
about your choices. "It's best to have the conversation when things are going
well, not as a response to some kind of financial request," says Klontz, co-author
of "Mind Over Money: Overcoming the Money Disorders that Threaten Our
Financial Health." "If there's something they do
regularly that is undermining your good habits, be specific about what it is
and ask them to change." As part of the
conversation, explain your financial goals, whether it's to pay off debt, buy a
house or retire early.

Suggest
lower-cost alternatives. Saying "no" is less awkward if you're prepared with a counterproposal,
says Amanda Clayman, a financial therapist in New York City. If your father wants to
celebrate a birthday in a pricey restaurant, for instance, invite the family to
your house for a potluck instead. Instead of a high-spending adventure, suggest
heading to a YMCA camp or state park. Also, remember that sometimes it's OK if
not everyone contributes equally to everything. In other words, you can stay in
a less expensive hotel on the family trip even though everyone else is in the nearby
five-star resort, or maybe you cover the cost of the DJ at your parents'
anniversary party and let your high-earning sibling pay for the food.

When you spend time with people who are out of your financial comfort zone, your brain gets the message that you don't belong to the group, and a lot of psychological and social forces do their best to bring you back to that comfort zone.

-- Brad Klonz
Financial psychologist

Line up an ally
in advance. Before
a situation in which you'll be under pressure to spend, choose one or two
relatives who are likely to be sympathetic and call them, says Mary Gresham, a
clinical and financial psychologist in Atlanta. Share your financial
limitations and ask them to support you. "It's a lot easier to talk to just one
or two people as opposed to telling 10 people at once," Gresham says. Later, those people can step in on your behalf
if everyone is pushing you to order dinner, not just an appetizer, or when the
group is mocking your old, paid-off car.

Make it tough to
overspend. If
you find yourself regularly overspending in certain situations, like every time
you go shopping with your sister-in-law, figure out a concrete way to remind
yourself of your financial goals during your time with her. Maybe it's sticking
the credit card bill you're trying to pay off in your purse, or writing your
budget for the day on a sticky note attached to your credit card. Another option: Leave the credit card at home
and just bring cash.

Find some support.
If
everyone in your family is out of your financial comfort zone, seek out a few like-minded friends who can encourage you in your money-related goals, Gresham says. You
can hold each other accountable, share your triumphs and setbacks and ask for
their advice on family issues.

Don't commit. Neveragree on the spot to buy or
participate in something that costs a lot of money. "Saying, 'I need to think
about it' lets you press pause and gets you out of an uncomfortable situation,"
Clayton says. Then you can regroup and figure out how to say "no" gracefully.
("I'm sorry, that doesn't fit into our budget" works well.)

Though Johnson's family now understands her frugal lifestyle,
there are still some awkward moments. "My sister used to love to have a big
birthday party every year at an expensive restaurant and everybody would bring
a gift," says Johnson, who blogs about saving money at clubthrifty.com. "For a
long time I was resentful about it. Finally I grew up enough to just say, 'I'm
sorry, I can't do it anymore.'"

The
hardest part, Johnson says, is letting go of any guilt you feel about saying
no. "When you're honest
with your family and give them boundaries, often they do get over it," she says. "I know I will
always be made fun of by my siblings for being cheap, but now I just don't care."

Published: July 20, 2012

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